Tuesday, May 31, 2011

The Art of the Dance - Negotiating the Price

The art of the dance, negotiating a price is an important part of what I do. This comes into play in both buying and selling. Tonight I danced as the seller. A guy drove an hour and a half from Dayton to look at bicycle that I had for sale. Since he contacted me right after I listed the bike and he came that night at 11pm to see it, I knew he was serious. This guy had obviously done a lot of dancing since he used nearly every move there is to get a lower price. The starting price was $1,100. I told him before he came that I would do $1,000 cash. He arrived and the dance began

1) Pointing out the flaws: This is usually the first and best move used in negotiating a price. I use it a lot. The light is missing, the front break doesn't work and the back wheel has a lot of pitting. Stating how much it will cost to fix the item is also important. $100 will buy a new light but how much will it will cost to fix the break is unknown. I could tell he really liked the bike so that didn't deter me. After all, he had driven 1 and a half hours to look at it.

2) I'm Already Here: Pointing out the fact that you are there and you have cash is another good strategy. The old "A bird in the hand is better than two in the bush" move. Wouldn't you rather have the cash today?

3) The other One: In this strategy you tell the seller that you are also planning on looking at another similar item. This let's the seller know that you have choices. In this instance he told me that he was planning on looking at a similar bike that was museum quality and only cost $200 more. This didn't work because his story had holes. At first he told me that the other bike was a 1947 and later said it was a 1952. He also told me that the owner owned a bicycle museum. This was also an indicator that he was bluffing because if the owner had such a vast knowledge of bicycles than he would know that one in the condition that he was talking about would be worth over 2 grand.

4) I Don't Have a Lot of Money to Spend: Pointing out that this purchase will significantly impact your finances and you only have a limited amount of cash can sometimes help in the negotiation. I'm of the opinion that you shouldn't buy something that has this kind of affect on your finances so this one doesn't work with me.

5) I Have Kids: This is a last ditch effort. This buyers kids were sleeping in the car. He said that his family may be eating bologna for a while after this purchase. I said that didn't sound so bad.

6) Meeting in the Middle: Giving up on the lower price and agreeing to up your offer to half of the difference. This one worked and I sold it to him for $925.


Francy said...

Did you at least offer to throw in some of your bologna recipes to help out his poor, suffering family?

Anonymous said...

I love the show 'Pawn Stars' and those are exactly the moves they always use.